The New Rules of IWMS: New Economy
Based on the book “What Would Google Do” by Jeff Jarvis, I’m writing a post series about the New Rules of IWMS.
Today is the fifth post of the series entitled “New Economy” in which I’ll discuss the impact Google has on the economic system, and the implications for IWMS vendors.
Small is the new big
Once upon a time in retail, you had to have a store, which needed location, location, location; capital to fill it with inventory; and cash flow to hire staff and buy ads to bring in customers. (Jarvis, 2009)
Not anymore.
Google has created a whole new economy.
The economy of the small.
Now you can find both customers and new marketplaces online at a fraction of the costs. In fact, you can run a company from your garage (Like Google did).
Yes, there will remain big companies, but they have to compete with a very large number of small-sized companies.
As the small sized companies don’t need a lot of office space, don’t need many employees, don’t need large advertising campaigns, and don’t need a lot of inventory, profits accrue fast.
Small and Corporate Real Estate
The economy of the small has its’ effect particularly on the corporate real estate (CRE) industry. The CRE industry is a perfect example of the scarcity economy.
There is only limited space available at the top locations, which makes it extremely expensive. In fact, it makes it more expensive than it should be.
Now, the corporate real estate industry is in trouble. Top locations need to compete with suburb garages / living rooms, as the economy of the small has changed working conditions.
Organizations are reevaluating their real estate portfolios, and reducing the number of square feet per person simply because it has many benefits in terms of real estate costs and sustainability.
This will inevitably lead to a reduction in the costs per square feet.
Small and IWMS
So, what should IWMS vendors learn from this?
- The strict physical separation between work and private will disappear. It means that more people want do their work from their home office. If your IWMS is not web based, you will be in trouble.
- Many real estate executives face constant pressure to adapt their real estate portfolios to changing market conditions. Your IWMS should support the constant question what-if?, and enable real estate executives to answer those questions.
- Work times will shift from the opening hours of the building to the work times of the employees. Employees need to be able to work 24×7 at any location they choose. Therefore 24×7 access to the IWMS needs to be guaranteed.
- As the cost of independence has dropped many one-man spin-offs have emerged. These independent agents can be of great value to the IWMS vendors. Companies should encourage and support some one-man spin-offs. (Jarvis, 2009)
Small and You
So what do you think about the economy of the small? How will it impact you? Please use the comment box below for your comments.
Resources
Jarvis, J. (2009). What Would Google Do. New York: HarperBusiness.
Great idea!
Two things come to mind when you talk about small businesses and the new way of managing space and space needs:
1. There are two new elements in the space equation. The traditional owned or leased corporate office space and the home office space for teleworkers has been augmented with the local coffeeshop or moving train car where mobile for mobile workers. You’ve already pointed out how web-based apps “work” better for those workers.
Now we’re seeing clietns ask us to connect to the pools of office space not-owned-by-them but available to their workers through services like LiquidSpace and vendors like MetroOffices. Suddenly the space that a company is utilizing has expanded to include temporary, but well structured space and that needs measurement and management.
The converse side of that is companies with lots of space, as they use technology like OnBoard to increase their worker-to-workspace ratios and workplace intelligence like Commander BI to identify how much space they own or lease but don’t need, are now looking to rent out that space and turn it from an expense and into revenue. they are now producers of that same temporary office space which other companys’ mobile workers may well consume.
So, what kind of space, how you measure and manage it, and whether or not it is an expense or a profit center has changed. And, as I type these words, is likely changing even more as technology evolves.
2. The demands on the RE executive are increasing and changing, and that’s a good thing.
The traditional model of ten year leases for large swaths of space and the savings those long term agreement bring are not keeping up with the needs to “be small”, hold only what you actually need right now, actually charge the lines of business for what they really use, and having some mechanism for increasing available space quickly when the business has growth.
So, the old, “buy big, buy for ten years” model isn’t competitive. It isn’t sustainable. Luckily, technology and workpalce services have evolved quickly to provide what RE executives need to cope with, succeed, and for those who move fast enough, open up a competitive advantage before the laggarts in their market catch up.
The Google effect you’re writing about has profound implications and I’m eager to see your next post.